Texas Instruments chief says data center demand is still growing

What did Texas Instruments report?

Texas Instruments (Nasdaq: TXN) reported quarterly profit and revenue above the consensus, the average analyst forecast. Revenue also grew from a year earlier.

Why it matters: Its guidance, the company's own forecast for the final quarter of the year, also topped analyst estimates for profit and revenue.

Growth was broad. Sales of analog and embedded processing chips both rose. Data center revenue grew fastest, and industrial and automotive sales also climbed. Personal electronics sales were flat.

Why did the shares fall after a beat?

The stock slid 1.8% on Thursday to close at $279.50. The company lost $4.7 billion in market value.

The drop came on a weak day for technology shares. The Nasdaq-100 slid 2.9%, and the technology sector fund fell 3.3%. Texas Instruments had also gained in the session before.

The shares now sit 15.9% below their 52-week high of $332.28, their highest price over the past year.

What did the chief executive say about demand?

Chief executive Gadi Katz said the company sees no slowdown in data center spending. He called it "actually growing demand."

Katz tied that to a wider chip lineup and a push for market share. Management expects industrial, automotive and data center demand to support sales in the current quarter.

The company is adding factory capacity at its Sherman and Lehi sites and expanding assembly and test work in Malaysia. Management said equipment availability remains a challenge.

Analog chip prices improved modestly in recent months, the company said, and it is discussing pricing for 2027.

What comes next?

What’s next: The next broad checkpoint is the Fed's interest-rate decision on Oct. 28 at 2 p.m. ET. A government estimate of economic growth follows on Oct. 29 at 8:30 a.m. ET.

Both could shape how investors value chipmakers and other technology stocks.